The annual report summarizes ArvinMeritor's fiscal year 2006. It discusses changes in the automotive industry landscape requiring the company to change. The company divested certain businesses, improved costs through restructuring, and established new operations in China. The company aims to expand globally and penetrate new markets with its commercial vehicle and emissions products.
2. The automotive landscape is changing at a faster
pace than ever before in our history. We realize that
we must also change to enable us to respond
quickly to market factors, while furthering our
ability to capitalize on the exciting opportunities in
the global vehicle markets.
Fine-Tuning the Product Portfolio
This fiscal year, we divested certain businesses that are no longer part
of our long-term business strategy. Completing these transactions
improved ArvinMeritor’s financial position and allowed us to focus
resources on our core light and commercial vehicle businesses.
Divestitures included:
• Commercial vehicle off-highway brake assets
ArvinMeritor Shareowners, • Equity share in a Purolator filters joint venture in India
• Purolator filters business in North America
• Aftermarket exhaust business in North America
Fiscal year 2006 was significant for ArvinMeritor and for the motor
vehicle industry. We witnessed events that had a dramatic impact on • Aftermarket ride control business in South Africa
customers worldwide, the vehicle manufacturers, and the entire supply • Aftermarket motion control business in North America
chain. Record high sales in most of the markets we serve; notable
growth in regions such as China and India; and new technologies Improving Our Cost Structure and Establishing the
Optimal Global Footprint
designed to improve safety, reduce emissions and enhance driver
satisfaction, were offset by massive restructuring actions, bankruptcies, Through a series of restructuring actions, we have taken steps to
production cuts, and rising raw material and energy costs. improve our cost structure across the company. While mindful of the
impact these actions have on our employees, we are constantly
The automotive landscape is changing at a faster pace than ever
assessing our global operations to identify ways to optimize our
before in our history. We, at ArvinMeritor, realize that we must also
capacity, leverage human and capital resources, and strengthen our
change and continue to position our company in ways that enable us
geographic footprint. Currently, fifty percent of the company’s sales are
to respond quickly to market factors while furthering our ability to
in North America; thirty-eight percent are in Europe; and 12 percent
capitalize on the exciting opportunities in the global vehicle markets.
are in Asia Pacific and other areas of the world.
Delivering Results and Increasing Financial Flexibility Our goal is to evolve the current geographic customer mix, through
I am proud of our team for the financial results and the impressive restructuring, alliances and new operations, to a more strategic
capital structure improvement actions that we accomplished this year. balance of one-third in North America; one-third in Europe; and one-
ArvinMeritor recorded sales of $9.2 billion from continuing operations, third in South America, Asia Pacific and other growth markets. This
translating to top line growth of 4 percent. Despite market headwinds, strategy will further improve our overall cost structure as we expand
we met financial expectations and improved the company’s balance into regions like Eastern Europe, South America and Asia, while also
sheet, resulting in our becoming an even stronger competitor among enabling us to better support our diversified customer base whose
the top-tier global automotive supplier group. Below are highlights: operations are growing in many regions of the world.
• Retired $672 million of mid-term debt We also see great potential to penetrate Asian and other regional
markets with products and services for which we are currently market
• Extended long-term debt maturities by issuing $300 million of
leaders in North America and Europe. As an example, we plan to
convertible notes maturing in 2026
expand our Commercial Vehicle Aftermarket (CVA) product and service
• Established more than $1 billion of secured credit facilities that
support business into Europe, as well as Asia and South America. With
extend maturities to 2011 and 2012
an established original equipment manufacturer presence in those
regions, strong ArvinMeritor brands including Meritor and Euclid, and
ArvinMeritor, Inc. ■ 2006 Annual Report
3. years of distribution channel expertise, CVA represents a profitable growth We will continue to share our accomplishments with you as we move
opportunity for ArvinMeritor, and one we are aggressively pursuing. forward in this process.
Adding to our already significant presence in Asia Pacific, this year we
Looking Forward to 2007
established six new operations in China, and began building a new trailer
Fiscal year 2007 promises to be one of challenge and opportunity. We
axle and suspension manufacturing facility in Wuxi, China. And, to further
have a leadership team that I consider to be the best in the industry, a
accelerate our global expansion strategy, we are establishing a regional
strong portfolio of products, a growing and diverse customer base, and an
headquarters office in Asia. We are excited about the benefits this will
impressive global footprint.
provide as we identify, pursue, and manage new business ventures in that
part of the world. We have a workforce of more than 27,000 employees committed to
continuous improvement, with a passion for our industry, and a drive to
Driving the Business Forward win. We have the vision and strategy to differentiate ourselves as a global
We were pleased to welcome five new leaders to our executive systems leader through product development and technology capabilities
management team. Each adds a unique blend of industry background and that can be applied across markets, like our wheel and axle lines. We are
experience to our existing strong management team. They are: developing products that will be “must-haves” for our customers, like our
new generation of electronic door latches. And we will continue to look for
• Jay Craig, Vice President and Controller
strategic business alliances that build our portfolio, improve our global
• Phil Martens, Senior Vice President and President,
reach and strengthen our research and development capabilities.
Light Vehicle Systems
Moving beyond 2007, we also acknowledge the real possibilities that exist
• Robert Ostrov, Senior Vice President, Human Resources, and
in other vehicle transportation markets. These markets may offer great
Chief Diversity Officer
opportunities in the future.
• Carsten Reinhardt, Senior Vice President and President,
Commercial Vehicle Systems During this time of such rapid change in the global motor vehicle industry,
we are also changing to meet and exceed our customers’ expectations,
• H. H. “Buddy” Wacaser, Senior Vice President and President,
and we are more confident than ever in the future of our company.
Emissions Technologies
Thank you for your continued support.
In addition, we also announced the election of Mary Lehmann as
Vice President and Treasurer.
Building On a Strong Foundation
While we are pleased with the progress we made in 2006, we recognize
Sincerely,
the need to accelerate change. Therefore, we recently launched an
exciting initiative at ArvinMeritor that we are calling Performance Plus. This
transformational program is designed to be much more than a cost
reduction activity. Performance Plus will define changes to our structure
and our culture that are necessary to maximize cost efficiencies; build
Charles G. “Chip” McClure
manufacturing excellence; increase our research and development
Chairman, CEO and President
commitment; further advance product innovation; identify new business
December 11, 2006
opportunities; and ultimately, enable us to deliver greater shareowner value
through increased profitability.
A diverse team of employees representing top talent was selected from
across the company and is being led by members of the executive
leadership team. This team’s mission is to identify and implement major
initiatives in two key areas:
Operational Excellence
Material Optimization
Manufacturing Excellence
Lean Overhead
Commercial Excellence
Stronger Engineering, Research and Development Pipeline
Product Growth
Aftermarket Growth
ArvinMeritor, Inc. ■ 2006 Annual Report
4.
5. UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended October 1, 2006
Commission File Number 1-15983
ARVINMERITOR, INC.
(Exact name of registrant as specified in its charter)
INDIANA 38-3354643
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2135 West Maple Road
Troy, Michigan 48084-7186
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (248) 435-1000
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
Title of each class Name of each exchange on which registered
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: NONE
DOCUMENTS INCORPORATED BY REFERENCE
6.
7. PART I
Item 1. Business.
Management’s Discussion and Analysis of Financial Condition and Results of Operations Financial Statements and
Supplementary Data,
Continuing Operations:
Discontinued Operations:
8. Financial Statements and Supplementary
Data
Risk Factors
Financial Statements and Supplementary Data
Business Strategies
Minimize the Risks of Cyclicality Through Business Diversity.
Products.
Customers.
Global Presence.
Focus on Organic Growth While Reviewing Strategic Opportunities.
9. Grow Content Per Vehicle Through Technologically Advanced Systems and Modules.
Enhance Core Products to Address Safety and Environmental Issues.
Strengthen our Presence in Emerging Global Markets
10. Drive a Continuous Improvement Culture Focused on Return on Capital.
Products
Fiscal Year Ended
September 30,
2006 2005 2004
Light Vehicle Systems
Emissions Technologies
11. Aperture Systems
Roof Systems.
Door Systems
Undercarriage Systems
Suspension Systems
Suspension Modules.
Wheel Products.
Commercial Vehicle Systems
Undercarriage and Drivetrain Systems
Truck Axles.
Drivelines and Other Products.
Suspension Systems and Trailer Products.
13. Specialty Systems
Off-Highway Vehicle Products.
Government Products.
Specialty Vehicle Products.
Discontinued Operations
Light Vehicle Aftermarket.
LVS Ride Control Systems.
Customers; Sales and Marketing
Management’s Discussion and Analysis of Financial Condition and Results of Operations — Overview — Results of
Operations.
Management’s
Discussion and Analysis of Financial Condition and Results of Operations
Risk Factors
Competition
14. Risk Factors
Raw Materials and Supplies
Strategic Initiatives
Restructuring.
Financial Statements and Supplementary Data
Divestitures.
Financial Statements and Supplementary Data
15. Acquisitions and Other Growth Initiatives.
Risk Factors
Joint Ventures
Financial Statements and Supplementary Data
Research and Development
Patents and Trademarks
16. Financial
Statements and Supplementary Data
Employees
Management’s Discussion and Analysis of Financial Condition and Results of Operations- Overview
Financial Statements and Supplementary Data
Environmental Matters
Financial Statements and Supplementary Data
17. International Operations
Financial Statements and Supplementary Data
Risk Factors
Quantitative and Qualitative Disclosures About Market Risk
Financial Statements and Supplementary Data
Seasonality; Cyclicality
Risk Factors
Year Ended September 30,
2006 2005 2004 2003 2002
18. Management’s Discussion and Analysis of Financial
Condition and Results of Operations — Overview — Results of Operations
Available Information
Cautionary Statement
Business
Risk Factors Legal
Proceedings Management’s Discussion and Analysis of Financial Condition and Results of Operations
Item 1A. Risk Factors.
We operate in an industry that is cyclical and that has periodically experienced significant year-to-year fluctuations
in demand for vehicles; we also experience seasonal variations in demand for our products.
19. We depend on large OEM customers.
We operate in a highly competitive industry.
A disruption in supply or a significant increase in price of raw materials or parts could impact our production and
increase our costs.
20. Work stoppages or similar difficulties could significantly disrupt our operations.
Our international operations are subject to a number of risks.
Our liquidity, including our access to capital markets and financing, could be constrained by our credit ratings, our
ability to comply with financial covenants in our debt instruments, and our suppliers extending normal trade credit
terms on our purchases.
21. Our strategic initiatives may be unsuccessful, may take longer than anticipated, or may result in unanticipated
costs.
We are exposed to environmental, health and safety and product liabilities.
We are exposed to asbestos litigation liability.
22. We are exposed to the rising cost of pension and other post-retirement benefits, and are currently involved in
litigation the outcome of which could further increase these costs.
23. Item 1B. Unresolved Staff Comments.
Item 2. Properties.
Engineering Facilities,
Sales Offices,
Manufacturing Warehouses and
Facilities Service Centers
Financial Statements and Supplementary Data
Owned Facilities Leased Facilities
Location LVS CVS LVA Other LVS CVS LVA Other Total
(in thousands of square feet)
Item 3. Legal Proceedings
Management’s Discussion and Analysis of Financial Condition and Results of Operations — Overview
Financial Statements and Supplementary Data
24. Financial Statements and Supplementary
Data
Business
Item 4. Submission of Matters to a Vote of Security Holders.
Item 4A. Executive Officers of the Registrant.
Charles G. McClure, Jr.
Vernon G. Baker, II
Jeffrey A. Craig,
Linda M. Cummins
James D. Donlon, III
Mary A. Lehmann
Perry L. Lipe
Philip R. Martens
Robert Ostrov
Carsten J. Reinhardt,
25. Rakesh Sachdev
H. H. “Buddy” Wacaser
Bonnie Wilkinson
PART II
Item 5. Market for the Registrant’s Common Equity and Related Stockholder Matters.
Fiscal Year 2006 Fiscal Year 2005
Quarter Ended High Low High Low
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
26. Item 6. Selected Financial Data.
Management’s Discussion and
Analysis of Financial Condition and Results of Operations Financial Statements and Supplementary Data
Year Ended September 30,
SUMMARY OF OPERATIONS 2006 2005 2004 2003 2002
FINANCIAL POSITION AT SEPTEMBER 30
27. Item 7. Management’s Discussion and Analysis of Financial Conditions and Results of Operations.
Overview
28.
29. Market Outlook
Year Ended September 30
2006 2005 2004 2003 2002
Company Outlook
30.
31. Results of Operations
Year Ended September 30,
2006 2005 2004
(in millions, except
per share amounts)
32. 2006 Compared to 2005
Sales
Dollar Change Due to
Dollar % Acquisitions Volume /
2006 2005 Change Change Currency Divestitures Other
Continuing Operations
Business Segments
Light Vehicle Systems (LVS)
Commercial Vehicle Systems (CVS)
33. Operating Income (Loss) and Operating Margins
Operating Income Operating Margins
$ %
2006 2005 Change Change 2006 2005 Change
LVS CVS Total
2006 2005 2006 2005 2006 2005
Business Segments
LVS
34. CVS
Other Income Statement Items
Equity in earnings of affiliates
Interest expense, net and other
Income tax benefit
Minority interest
Loss from continuing operations
Loss from discontinued operations
35. 2005 Compared to 2004
Sales
Dollar Change Due to
Dollar % Acquisitions / Volume /
2005 2004 Change Change Currency Divestitures Other
Continuing Operations
36. Business Segments
LVS
CVS
Operating Income and Operating Margins
Operating Income Operating Margins
$ %
2005 2004 Change Change 2005 2004 Change
LVS CVS Total
37. Business Segments
LVS
CVS
Other Income Statement Items
Equity in earnings of affiliates
38. Interest expense, net and other
Provision for income taxes
Minority interest
Income from continuing operations
Loss from discontinued operations
Non-Consolidated Joint Ventures
39. Financial Condition
Capitalization
September 30,
2006 2005
Cash Flows
Fiscal Year Ended September 30,
2006 2005 2004
OPERATING CASH FLOWS
40. Cash provided by operating activities
Fiscal Year Ended September 30,
2006 2005 2004
INVESTING CASH FLOWS
Cash provided by investing activities
41. Fiscal Year September 30,
2006 2005 2004
FINANCING CASH FLOWS
Cash used for financing activities
Liquidity and Contractual Obligations
2010– There-
Total 2007 2008 2009 2011 after
44. Off-Balance Sheet Arrangements
Guarantees
Tender Offer
Critical Accounting Policies
Pensions
2006 2005
U.S. Non-U.S. U.S. Non-U.S.
discount rate
45. assumed return on plan assets
rate of compensation
Effect on All Plans — June 30, 2006
Increase
(Decrease) in Increase
Accumulated (Decrease)
Percentage Increase Other in 2006
Point (Decrease) Comprehensive Pension
Change in PBO Loss Expense
Retiree Medical
46. 2006 2005
discount rate
health care cost trend rate
2006 2005
Product Warranties
Asbestos — Maremont Corporation (“Maremont”)
51. New accounting standards implemented
“Share-Based Payment,”
“Accounting and Disclosure Guidance for the Foreign
Repatriation Provision within the American Jobs Creation Act of 2004.”
International Operations
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
52. Sensitivity Analysis:
Assuming a Assuming a Favorable /
10% Increase in 10% Decrease in (Unfavorable)
Rates Rates Impact on
Market Risk
Foreign Currency Sensitivity:
Interest Rate Sensitivity:
53. Item 8. Financial Statements and Supplementary Data.
Report of Independent Registered Public Accounting Firm
Internal Control—Integrated Framework
54. ARVINMERITOR, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(In millions, except per share amounts)
Year Ended September 30,
2006 2005 2004
See Notes to Consolidated Financial Statements. Fiscal year 2005 amounts have been restated for discontinued operations.
55. ARVINMERITOR, INC.
CONSOLIDATED BALANCE SHEET
(In millions)
September 30,
2006 2005
ASSETS
LIABILITIES AND SHAREOWNERS’ EQUITY
See Notes to Consolidated Financial Statements. Fiscal year 2005 amounts have been restated for discontinued operations.
56. ARVINMERITOR, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(In millions)
Year Ended September 30,
2005 2004
2006
See Notes to Consolidated Financial Statements. Fiscal year 2005 and 2004 amounts have been restated for discontinued
operations.
57. ARVINMERITOR, INC.
CONSOLIDATED STATEMENT OF SHAREOWNERS’ EQUITY
(In millions, except per share amounts)
Year Ended September 30,
2006 2005 2004
See Notes to Consolidated Financial Statements.
58. ARVINMERITOR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
2. SIGNIFICANT ACCOUNTING POLICIES
Use of Estimates
Consolidation and Joint Ventures
Foreign Currency
59. ARVINMERITOR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Impairment of Long-Lived Assets
Discontinued Operations
Revenue Recognition
Allowance for Doubtful Accounts
Earnings per Share
September 30,
2006 2005 2004
60. ARVINMERITOR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Other
New Accounting Standards
New accounting standards to be implemented:
61. ARVINMERITOR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
New accounting standards implemented:
“Share-Based Payment,”
“Accounting and Disclosure Guidance for the Foreign
Repatriation Provision within the American Jobs Creation Act of 2004.”
3. DISCONTINUED OPERATIONS
Light Vehicle Aftermarket
62. ARVINMERITOR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Light Vehicle Ride Control
63. ARVINMERITOR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Coil Coating
Year Ended September 30,
2006 2005 2004
September 30,
2006 2005
64. ARVINMERITOR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
4. GOODWILL
LVS CVS Total
65. ARVINMERITOR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
5. RESTRUCTURING COSTS
Fiscal year 2005 program:
Other restructuring actions:
66. ARVINMERITOR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Fiscal year 2004 actions
Employee Plant
Termination Asset Shutdown
Benefits Impairment & Other Total
6. ACQUISITIONS AND DIVESTITURES
67. ARVINMERITOR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
7. ACCOUNTS RECEIVABLE SECURITIZATION AND FACTORING
68. ARVINMERITOR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
8. OTHER INCOME (EXPENSE)
Year Ended September 30,
2006 2005 2004
9. INVENTORIES
September 30,
2006 2005
69. ARVINMERITOR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
10. OTHER CURRENT ASSETS
September 30,
2006 2005
11. NET PROPERTY
September 30,
2006 2005
70. ARVINMERITOR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
12. OTHER ASSETS
September 30,
2006 2005
“Accounting for the Costs of Computer Software Developed or Obtained
for Internal Use,”
13. INVESTMENTS IN NON-CONSOLIDATED JOINT VENTURES
71. ARVINMERITOR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
September 30,
2006 2005
Year Ended
September 30,
2006 2005 2004
September 30,
2006 2005
Year Ended September 30,
2006 2005 2004
72. ARVINMERITOR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
14. OTHER CURRENT LIABILITIES
September 30,
2006 2005
2006 2005 2004
73. ARVINMERITOR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
15. OTHER LIABILITIES
September 30,
2006 2005
16. LONG-TERM DEBT
September 30,
2006 2005
Convertible
Securities
74. ARVINMERITOR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Debt Securities
Interest
Rate Swaps
Investment in Debt Defeasance Trust
Convertible Securities
Debt Securities
75. ARVINMERITOR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Senior Secured
Credit Facilities
Subordinated Debentures
Senior Secured Credit Facilities
76. ARVINMERITOR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Accounts Receivable Securitization
Related Parties
Interest Rate Swap Agreements
77. ARVINMERITOR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Leases
Covenants
78. ARVINMERITOR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
17. FINANCIAL INSTRUMENTS
Foreign Exchange Contracts
Fair Value
September 30,
2006 2005
Carrying Fair Carrying Fair
Value Value Value Value
79. ARVINMERITOR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
18. SHAREOWNERS’ EQUITY
Common Stock
Treasury Stock
80. ARVINMERITOR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Accumulated Other Comprehensive Loss
Foreign Minimum Unrealized
Currency Pension Gains
Translation Liability (Losses) Total
19. EQUITY BASED COMPENSATION
Stock Options
Remaining Aggregate
Exercise Contractual Intrinsic
Shares Price Life Value
81. ARVINMERITOR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Outstanding Exercisable
Remaining
Contractual Exercise Exercise
Shares Life Price Shares Price
2004
Restricted Stock, Restricted Units, and Performance Share Units
Weighted-
Average
Number of Grant-Date
Nonvested Shares Shares Fair Value
82. ARVINMERITOR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
20. RETIREMENT MEDICAL PLANS
83. ARVINMERITOR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
2006 2005 2004
2006 2005
2006 2005
84. ARVINMERITOR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
September 30,
2006 2005
2006 2005 2004
85. ARVINMERITOR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
2006 2005
21. RETIREMENT PENSION PLANS
U.S. Plans
2006 2005 2004
Assumptions as of June 30
Non-U.S. Plans
Assumptions as of June 30 2006 2005 2004
86. ARVINMERITOR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
2006 2005
June 30 measurement date U.S. Non- U.S. Total U.S. Non- U.S. Total
87. ARVINMERITOR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
2006 2005
U.S. Non-U.S. U.S. Non-U.S.
2006 2005
June 30 measurement date U.S. Non-U.S. Total U.S. Non-U.S. Total
88. ARVINMERITOR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
2006 2005
U.S. Non-U.S. Total U.S. Non-U.S. Total
September 30,
2006 2005
2006 2005
ABO Assets ABO Assets
Exceeds Exceeds Exceeds Exceeds
Assets ABO Total Assets ABO Total
2006 2005 2004
89. ARVINMERITOR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
U.S. Non U.S. Total
22. INCOME TAXES
2006 2005 2004
90. ARVINMERITOR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
September 30,
2006 2005
September 30,
2006 2005
92. ARVINMERITOR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
2006 2005 2004
23. CONTINGENCIES
Environmental
93. ARVINMERITOR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Superfund Non-Superfund
Sites Sites Total
Asset Retirement Obligations
Asbestos
Maremont Corporation
94. ARVINMERITOR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
September 30,
2006 2005
Pending and Future Claims:
95. ARVINMERITOR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Shortfall and other:
Recoveries:
Rockwell
96. ARVINMERITOR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Contingencies Related to Work Stoppage
Product Recall Campaign
97. ARVINMERITOR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Guarantees
Indemnifications
Other
24. BUSINESS SEGMENT INFORMATION
98. ARVINMERITOR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Sales: 2006 2005 2004
Earnings: 2006 2005 2004
Depreciation and Amortization: 2006 2005 2004
Capital Expenditures: 2006 2005 2004
99. ARVINMERITOR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Segment Assets: 2006 2005 2004
Sales by Geographic Area: 2006 2005 2004
Assets by Geographic Area (excludes assets of discontinued operations): 2006 2005
100. ARVINMERITOR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
25. QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
2006 Fiscal Quarters (Unaudited)
First Second Third Fourth 2006
(In millions, except share- related data)
2005 Fiscal Quarters (Unaudited)
First Second Third Fourth 2005
(In millions, except share-related data)
101. ARVINMERITOR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
26. SUPPLEMENTAL FINANCIAL INFORMATION
2006 2005 2004
(In millions)
27. SUPPLEMENTAL GUARANTOR CONDENSED CONSOLIDATING FINANCIAL STATEMENTS
102. ARVINMERITOR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
(In millions)
Fiscal Year Ended September 30, 2006
Parent Guarantors Non-Guarantors Elims Consolidated
103. ARVINMERITOR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
(In millions)
Fiscal Year Ended September 30, 2005
Parent Guarantors Non-Guarantors Elims Consolidated
104. ARVINMERITOR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
(In millions)
Fiscal Year Ended September 30, 2004
Parent Guarantors Non-Guarantors Elims Consolidated
105. ARVINMERITOR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
CONDENSED CONSOLIDATING BALANCE SHEET
(In millions)
September 30, 2006
Parent Guarantors Non- Guarantors Elims Consolidated
106. ARVINMERITOR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
CONDENSED CONSOLIDATING BALANCE SHEET
(In millions)
September 30, 2005
Parent Guarantors Non-Guarantors Elims Consolidated
107. ARVINMERITOR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
(In millions)
Fiscal Year Ended September 30, 2006
Parent Guarantors Non- Guarantors Elims Consolidated
108. ARVINMERITOR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
(In millions)
Fiscal Year Ended September 30, 2005
Parent Guarantors Non-Guarantors Elims Consolidated
109. ARVINMERITOR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
(In millions)
Fiscal Year Ended September 30, 2004
Parent Guarantors Non-Guarantors Elims Consolidated
28. SUBSEQUENT EVENT
110. Item 9A. Controls and Procedures.
Disclosure Controls and Procedures
Management Report on Internal Control over Financial Reporting
Internal Control – Integrated Framework
Report of Independent Registered Public Accounting Firm
Internal Control—Integrated Framework
111. Internal Control—Integrated
Framework
Internal Control—Integrated Framework
Changes in Internal Control Over Financial Reporting
Item 9B. Other Information.
112. PART III
Item 10. Directors and Executive Officers of the Registrant.
Election of Directors, Information as to Nominees for Directors and Continuing
Directors, Involvement in Certain Legal Proceedings Section 16(a) Beneficial Ownership Reporting Compliance
Item 11. Executive Compensation.
Compensation of Directors Executive Compensation, Agreements with Named
Executive Officers Retirement Benefits
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
Security Ownership of Certain Beneficial Owners and Management
Voting Securities Ownership by Management of Equity Securities
Securities Authorized for Issuance under Equity Compensation Plans
Securities Authorized for Issuance under Other Equity Compensation Plans
Item 13. Certain Relationships and Related Transactions.
113. Item 14. Principal Accountant Fees and Services.
Independent Accountants’ Fees
PART IV
Item 15. Exhibits and Financial Statement Schedules.
Page
119. SCHEDULE II
ARVINMERITOR, INC.
VALUATION AND QUALIFYING ACCOUNTS
For the Year Ended September 30, 2006, 2005, 2004
Balance at Charged
Beginning to costs Other Balance at End
Description (In millions) of Year and expenses Deductions of year
120. Board of Directors
Charles G. McClure Joseph B. Anderson, Jr. Rhonda L. Brooks David W. Devonshire Ivor J. Evans
Chairman of the Board Chairman of the Board President Executive Vice President Retired Vice Chairman
Chief Executive Officer and Chief Executive and Chief Financial
R. Brooks Advisors, Inc. Union Pacific Railroad
and President Officer Officer
ArvinMeritor, Inc. TAG Holdings, LLC Motorola, Inc.
Joseph P. Flannery William D. George, Jr. Richard W. Hanselman Victoria B. Jackson James E. Marley
Chairman of the Board Retired President and Chairman of the Board President Retired Chairman
President and Chief Chief Executive Officer of the Board
Forward Air Corporation Victoria Bellè, Inc.
Executive Officer S.C. Johnson Wax AMP Inc.
Uniroyal Holding, Inc.
William R. Newlin Steven G. Rothmeier Andrew J. Schindler
Executive Vice President Chairman and Retired Chairman
and Chief Administrative Chief Executive Officer Reynolds American Inc.
Officer Great Northern Capital
Dick’s Sporting
Goods, Inc.
ArvinMeritor, Inc. ■ 2006 Annual Report
121. Executive Officers
Charles G. McClure Vernon G. Baker, II Jeffrey A. Craig Linda M. Cummins James D. Donlon, III
Chairman of the Board Senior Vice President Vice President Senior Vice President, Senior Vice President
Chief Executive Officer and General Counsel and Controller Communications and Chief Financial
and President Officer
Mary A. Lehmann Perry L. Lipe Philip R. Martens Robert Ostrov Carsten J. Reinhardt
Vice President and Senior Vice President Senior Vice President Senior Vice President, Senior Vice President
Treasurer and Chief Information and President, Light Human Resources and President,
Officer Vehicle Systems Commercial Vehicle
Systems
Rakesh Sachdev H. H. Wacaser Bonnie Wilkinson
Senior Vice President, Senior Vice President Vice President
Strategy and Corporate and President, Emissions and Secretary
Development Technologies
ArvinMeritor, Inc. ■ 2006 Annual Report
122. Shareowner Information
Annual Meeting Independent Auditors
The company’s annual meeting of shareowners will be held in Troy, Mich., Deloitte & Touche LLP
on Friday, Jan. 26, 2007. A notice of meeting and proxy material will be 600 Renaissance Center
mailed to shareowners on or about Dec. 11, 2006. Detroit, MI 48243-1704
Phone: (313) 396-3000
ArvinMeritor Headquarters
Investor Relations
2135 West Maple Road
Troy, MI 48084-7186 Security analysts and professional investors should contact:
Phone: (248) 435-1000 Investor Relations
Fax: (248) 435-1393 2135 West Maple Road
www.arvinmeritor.com Troy, MI 48084-7186
www.arvinmeritor.com/investor/investor.asp
Board Communications Phone: (866) INFO-ARM or (866) 463-6276
For questions or concerns with respect to internal controls, auditing and Fax: (248) 435-1189
accounting matters, you may contact the Audit Committee of the Board of E-mail: investor.relations@arvinmeritor.com
Directors at the following address:
Copies of annual reports, Forms 10-K and 10-Q, and
ArvinMeritor Audit Committee
other ArvinMeritor publications can be obtained at
330 East Maple Road
www.arvinmeritor.com/investor/investor.asp or by
PMB 315
calling (866) INFO-ARM or (866) 463-6276.
Birmingham, MI 48009
E-mail: audit.committee@arvinmeritor.com New York Stock Exchange
For other questions or concerns, you may contact the Board of Directors at Common Stock (Symbol: ARM)
the following address:
ArvinMeritor Board of Directors Shareowner Services
330 East Maple Road Communications about share ownership, book-entry accounts,
PMB 335 dividend payments, transfer requirements, changes of address,
Birmingham, MI 48009 lost stock certificates and account status should be directed to:
The Bank of New York
Corporate Media Relations
Church Street Station
Members of the media should contact: P.O. Box 11258
Media Relations New York, NY 10286-1258
Phone: (248) 435-7115 Toll Free: (866) 517-4570
www.stockbny.com
Dividend Reinvestment and Additional Investments in
ArvinMeritor Common Stock Transfer Agent and Registrar
The Bank of New York provides the BuyDIRECT Program for ArvinMeritor The Bank of New York
shareowners, under which current shareowners may elect to reinvest Church Street Station
dividends and/or make optional cash investments in additional shares of P.O. Box 11258
ArvinMeritor common stock. The program also allows cash investments in New York, NY 10286-1258
ArvinMeritor common stock by first-time investors, with a $500 minimum Toll Free: (866) 517-4570
initial investment. Shareowners may also sell their shares through the www.stockbny.com
BuyDIRECT Program.
Requests for a brochure about the BuyDIRECT Program,
and communications about sale of shares, optional cash investments and
liquidations should be directed to:
The Bank of New York
Dividend Reinvestment Department
P.O. Box 1958
Newark, NJ 07101-9774
Toll Free: (866) 517-4570